FRONT-END REALIGNMENT

LISA SAXTON

Retailers are discovering it's not enough to toss candy on the checkouts and wait for automatic, impulse-driven sales.

Fact is, many chains have come to realize that creative merchandising and a tweaking of product mix can enhance sales at the front end.

Jons Supermarkets, a nine-store independent based in Los Angeles, recently instituted a new checkout candy rack system.

The reason for the change, said Wanda Lovelace, Jons' nonfood buyer and front-end merchandiser, was twofold. "First of all, candy's profit is very high, so we wanted to get as much on the racks as possible. Second, there's the income you get from selling the space [to manufacturers]."

"These things take quite a long time to develop because they're all cost-shared between the candy companies as well as magazines with retail display allowance payments," explained Nick Wedberg, vice president of sales at Plumb's Inc., Muskegon, Mich. Wedberg brought in new checkout racks for his company just last month. "We did it to increase profits and sales in the magazine section and candy," he said.

That was the motivation behind the new racks at Jons as well, according to Lovelace.

"As a matter of fact, this is the first time we really had good fixtures and uniformity at the front end in all of our stores," she said.

Today, Jons has planogrammed racks for each store to follow. The number of checkout lanes ranges from five to 10, depending on store size.

"Now we have schematics and [suppliers] who have designated their time to be in our stores to make sure their product is properly represented. And that's helped us."

Prior to the front-end revitalization, Lovelace said, Jons never reviewed the candy category at the checkouts. Now, however, it will be studied once a year.

Ross Nixon, vice president of merchandising at Des Moines, Iowa-based Dahl's Food Markets, said his company also refitted its checkouts with new fixtures within the last six months.

"It had probably been about six or seven years [since the last reset] and there had been a lot of changes with the magazines and the varieties of gums and candies," Nixon said.

"Our old racks were becoming a little outdated and dilapidated. So we replaced them with something we felt was more in tune with the times."

Retailers have a lot of assistance from candy manufacturers in setting up their new fixtures, which generally results in a few more stockkeeping units of candy. Suppliers generally come in with prototypes, which get adjusted to fit individual needs, retailers told SN. They find it helpful to keep manufacturers involved in the process.

Some chains, such as Harris Teeter, Charlotte, N.C., have a well-oiled system of checks and balances at the front end.

"We review the candy category twice a year in order to update for new products or adjust to changes in the market," noted Ruth Kinzey, manager of corporate communications at Harris Teeter. "And although the mix of candy has changed slightly over the past year, there have been no major changes in the mix of products offered."

Harris Teeter has had its existing front-end candy racks for more than two years, she said. "The candy-magazine rack extends toward the back of the store from the checkout counter. Most of the racks are approximately 60 inches long and incorporate other products into the display such as gum and magazines."

The chain also has some candy-free checkout lanes, which, given candy's profitability, raises the question of a possible negative impact on a company's bottom line.

"Although some impact on sales is visible, the overall effect is not significant," Kinzey said.

"Some product is sold on impulse. However, if a customer wants to purchase a pack of gum or a candy bar, they usually select the checkout lane that carries the desired product. The candy-free lanes are, of course, a convenience for the parent who does not want to tempt a child and does not plan on purchasing candy anyway," she said.

"I think offering no-candy checkout lanes is good public relations," said Paul Berger, assistant buyer at Food City Markets, Harrison, N.Y., which features a candy-free zone. "And I haven't really noticed that great an impact on candy sales. If people want candy, they'll go down a lane that has it."

Tidyman's Inc., Greenacres, Wash., is another chain that is revamping its checkout merchandisers to seize the sale.

"We're doing a new schematic in our checkout to add new items," explained Dixie Young, grocery buyer at Tidyman's.

"And we've got a new front-end merchandiser rack that fits in front of each checkstand. It allows for everyday items like Certs, and other selected [smaller] items to fit on top. Underneath is going to be used for candy bars and promotional products."

Young said she expects the new rack system to "definitely" improve candy sales. "When you have candy down the checkstands, you're only going to get people that are in that checkstand. But if it's facing the front, everybody can buy from it."

At Plumb's, Wedberg said his new racks -- the cost of which was shared by some of the major manufacturers -- allow for more SKUs that are placed according to volume and profit.

"We look at the top 100 to 200 [products] in candy sales and we base our decision on the top-selling items in that category and the profit that corresponds to that."

The idea, he said, was to not only increase candy SKUs at the front end, but also to raise profits.

"If you started with 30 items on your candy rack and you went to 40, you're going to have additional profit based on those additional 10 units because you're going to increase your sales and thus increase your profit," he said.

On average, Wedberg said he increased the SKU count by 5% to 10%, depending on the size of the store. "And I think our profit, hopefully, will go higher than that."

Coincidentally, Plumb's increased the number of nonchocolate products over chocolate with the new planogram, mirroring the national trend of people seeking candies lower in fat. "Some people don't want to do the chocolate thing, so they buy Skittles or Lifesavers."

"Basically, we had the gum and candy racks on one lane and then the magazine racks on another lane," said Dahl's Nixon, regarding his old front-end setup. "And now we've gotten a little larger rack and we have gum and magazines on every lane.

"It's too early to tell if the new arrangement is increasing candy sales. But I would say, without a doubt, it has to, because we're offering a greater variety of products to more people as they go through. I can't believe we're not enhancing our sales."

All the top candy players helped Jons Markets organize its new candy layout, according to Lovelace. "They completed the planogram, because they were all charged for their space up there."

The new configuration calls for chocolate candy to be on one side of the checkout lane and nonchocolate on the other. "This way, we figure, consumers have access to candy on both sides of the checkout."

Ingles Markets, Black Mountain, N.C., is another chain looking at changing its checkout lanes, according to Vic Fisher, vice president of operations and sales.

"We haven't changed our racks in the last three years," he said, "other than adding new items as they come along and deleting old ones. But two or three years is about the life of those candy racks."

Although Fisher said it was time for a change, he didn't see anything major in Ingles' future, just a rearrangement of products with no real increase or decrease in product count.